Code of Virginia Title 45.2. Mines, Minerals, and Energy Subtitle IV. Gas and Oil   Chapter 16. Virginia Gas and Oil Act  Article 1. General Provisions§ 45.2-1600. (Effective October 1, 2021) DefinitionsAs used in this chapter, unless the context requires a different meaning:  "Abandonment of a well" or "cessation of well operations" means the time at which (i) a gas or oiloperator has ceased operation of a well and has not properly plugged the well and reclaimed thesite as required by this chapter, (ii) a gas or oil operator has allowed the well to become incapableof production or conversion to another well type, or (iii) the Director revokes a permit or forfeitsa bond covering a gas or oil operation.  "Associated facility" means any facility utilized for gas or oil operations in the Commonwealth,other than a well or a well site.  "Barrel" means 42 U.S. gallons of liquids, including slurries, at a temperature of 60 degreesFahrenheit.  "Board" means the Virginia Gas and Oil Board.  "Coalbed methane gas" means occluded natural gas produced from coalbeds and rock strataassociated with it.  "Coalbed methane gas well" means a well capable of producing coalbed methane gas.  "Coalbed methane gas well operator" means any person who operates or has been designated tooperate a coalbed methane gas well.  "Coal claimant" means a person identified as possessing an interest in production royalties whena drilling unit is force-pooled or who asserts or possesses a claim to funds that are held in escrow,for a force-pooled coalbed methane gas well, or in suspense, for a voluntarily pooled coalbedmethane gas well, by virtue of owning an interest in the coal estate contained within the drillingunit subject to the pooling order or agreement.  "Coal operator" means any person who operates or has the right to operate a coal mine.  "Coal owner" means any person who owns, leases, mines and produces, or has the right to mineand produce a coal seam.  "Coal seam" means any stratum of coal 20 inches or more in thickness. "Coal seam" includes astratum of less than 20 inches in thickness if it (i) is being commercially worked or (ii) in thejudgment of the Department could foreseeably be commercially worked and will requireprotection if a well is drilled through it.  "Correlative right" means the right of each gas or oil owner having an interest in a single pool tohave a fair and reasonable opportunity to obtain and produce his just and equitable share ofproduction of the gas or oil in such pool or its equivalent without being required to drillunnecessary wells or incur other unnecessary expenses to recover or receive the gas or oil or its

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equivalent.  "Cubic foot of gas" means the volume of gas contained in one cubic foot of space at a standardpressure base of 14.73 pounds per square foot and a standard temperature base of 60 degreesFahrenheit.  "DEQ" means the Department of Environmental Quality.  "Disposal well" means any well drilled or converted for the disposal of drilling fluids, producedwaters, or other wastes associated with gas or oil operations.  "Drilling unit" means the acreage on which one gas or oil well may be drilled.  "Enhanced recovery" means (i) any activity involving injection of any air, gas, water, or otherfluid into the productive strata; (ii) the application of pressure, heat, or other means for thereduction of viscosity of the hydrocarbons; or (iii) the supplying of additional motive force otherthan normal pumping to increase the production of gas or oil from any well or pool.  "Evidence of a proceeding or agreement" means written evidence that the coal claimant has (i)filed and has pending a judicial or arbitration proceeding against the gas claimant to determinethe ownership of the coalbed methane gas and the right to the funds held in escrow or suspenseor (ii) reached an agreement with the gas claimant to apportion the funds between them.  "Exploratory well" means any well drilled to (i) find and produce gas or oil in an unproven area,(ii) find a new reservoir in a field previously found to be productive of gas or oil in anotherreservoir, or (iii) extend the limits of a known gas or oil reservoir.  "Field rules" means rules established by order of the Board that define a pool, drilling units,production allowables, or other requirements for gas or oil operations within an identifiable area.  "First point of sale" means, for oil, the point at which the oil is (i) sold, exchanged, or transferredfor value from one person to another person or (ii) when used by the original owner of the oil,transported off the permitted site and delivered to another facility for use by the original owner."First point of sale" means, for gas, the point at which the gas is (a) sold, exchanged, ortransferred for value to any interstate or intrastate pipeline, local distribution company, orperson for use by such person or (b) when used by the owner of the gas for a purpose other thanthe production or transportation of the gas, delivered to a facility for use.  "Gas" or "natural gas" means all natural gas, whether hydrocarbon, nonhydrocarbon, or anycombination or mixture thereof, including hydrocarbons, hydrogen sulfide, helium, carbondioxide, nitrogen, hydrogen, casing head gas, and all other fluids not defined as oil pursuant tothis section.  "Gas claimant" means a person who is identified as possessing an interest in production royaltieswhen a drilling unit is forced-pooled or who asserts or possesses a claim to funds that are held inescrow, for a force-pooled coalbed methane gas well, or in suspense, for a voluntarily pooledcoalbed methane gas well, by virtue of owning an interest in the gas estate contained within thedrilling unit subject to the pooling order or agreement.  "Gas or oil operations" means any (i) activity relating to drilling, redrilling, deepening,stimulating, production, enhanced recovery, converting from one type of a well to another,combining or physically changing to allow the migration of fluid from one formation to another,

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or plugging or replugging any well; (ii) ground-disturbing activity relating to the development,construction, operation, or abandonment of a gathering pipeline; (iii) development, operation,maintenance, or restoration of any site involved with gas or oil operations; or (iv) workundertaken at a facility used for gas or oil operations. "Gas or oil operations" embraces all of theland or property that is used for or that contributes directly or indirectly to a gas or oil operation,including all roads.  "Gas or oil operator" means any person who operates or has been designated to operate any gasor oil well or gathering pipeline.  "Gas or oil owner" means any person who owns, leases, has an interest in, or has the right toexplore for, drill, or operate a gas or oil well as principal or lessee. If the gas is owned separatelyfrom the oil, this definition shall apply separately to the gas owner or oil owner.  "Gas title conflicts" means conflicting ownership claims between gas claimants. "Gas titleconflicts" does not include conflicting ownership claims between a gas claimant and a coalclaimant.  "Gathering pipeline" means a pipeline that is used or intended for use in the transportation of gasor oil from the well to (i) a transmission pipeline regulated by the U.S. Department ofTransportation or the State Corporation Commission or (ii) an offsite storage, marketing, orother facility where the gas or oil is sold.  "Geophysical operator" means a person who has the right to explore for gas or oil using ground-disturbing geophysical exploration.  "Gob" means the de-stressed zone associated with any full-seam extraction of coal that extendsabove and below the mined-out coal seam.  "Ground-disturbing" means any changing of land that could result in soil erosion from water orwind and the movement of sediments into state waters, including clearing, grading, excavating,drilling, and transporting and filling of land.  "Ground-disturbing geophysical exploration" or "geophysical operation" means any activity insearch of gas or oil that breaks or disturbs the surface of the earth, including road construction orcore drilling. The term does not include the conduct of (i) a gravity, magnetic, radiometric, orsimilar geophysical survey or (ii) a vibroseis or similar seismic survey.  "Injection well" means any well used to inject or otherwise place any substance associated withgas or oil operations into the earth or underground strata for disposal, storage, or enhancedrecovery.  "Inspector" means the Virginia Gas and Oil Inspector appointed by the Director pursuant to §45.2-1604 or such other public officer, employee, or other authority who in an emergency actsinstead of, or by law is assigned the duties of, the Virginia Gas and Oil Inspector.  "Log" means the written record progressively describing all strata, water, oil, or gas encounteredin drilling, depth and thickness of each bed or seam of coal drilled through, quantity of oil,volume of gas, pressures, rate of fill-up, freshwater-bearing and saltwater-bearing horizons anddepths, cavings strata, casing records, and other information usually recorded in the normalprocedure of drilling. "Log" includes electrical survey records or electrical survey logs. 

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"Mine" means an underground or surface excavation or development with or without shafts,slopes, drifts, or tunnels for the extraction of coal, minerals, or nonmetallic materials, commonlydesignated as mineral resources, and the hoisting or haulage equipment or appliances, if any, forthe extraction of the mineral resources. "Mine" includes all of the land or property of the miningplant, including both the surface and subsurface, that is used in or contributes directly orindirectly to the mining, concentration, or handling of the mineral resources, including all roads.  "Mineral" means the same as that term is defined in § 45.2-1200.  "Mineral operator" means any person who operates or has the right to operate a mineral mine.  "Mineral owner" means any person who owns minerals, leases minerals, mines and producesminerals, or has the right to mine and produce minerals and to appropriate such minerals that heproduces from it, either for himself or for himself and others.  "Nonparticipating operator" means a gas or oil owner of a tract that is included in a drilling unitwho elects to share in the operation of the well on a carried basis by agreeing to have hisproportionate share of the costs allocable to his interest charged against his share of productionfrom the well.  "Offsite disturbance" means any soil erosion, water pollution, or escape of gas, oil, or waste fromgas, oil, or geophysical operations off a permitted site that results from activity conducted on apermitted site.  "Oil" means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, that areproduced at the well in liquid form by ordinary production methods and are not the result ofcondensation of gas after it leaves the underground reservoir.  "Orphaned well" means any well abandoned prior to July 1, 1950, or for which no records existconcerning its drilling, plugging, or abandonment.  "Participating operator" means a gas or oil owner who elects to (i) bear a share of the risks andcosts of drilling, completing, equipping, operating, plugging, and abandoning a well on a drillingunit and (ii) receive a share of production from the well equal to the proportion that the acreagein the drilling unit he owns or holds under lease bears to the total acreage of the drilling unit.  "Permittee" means any gas, oil, or geophysical operator holding a permit for gas, oil, orgeophysical operations issued under authority of this chapter.  "Person under a disability" means the same as that term is defined in § 8.01-2.  "Pipeline" means any pipe above or below the ground used or to be used to transport gas or oil.  "Plat" or "map" means a map, drawing, or print showing the location of a well, mine, or quarry, orother information required under this chapter.  "Pool" means an underground accumulation of gas or oil in a single and separate naturalreservoir. A pool is characterized by a single natural pressure system so that production of gas oroil from one part of the pool tends to or does affect the reservoir pressure throughout its extent.A pool is bounded by geologic barriers in all directions, such as geologic structural conditions,impermeable strata, or water in the formation, so that it is effectively separated from any otherpool that may be present in the same geologic structure. A "coalbed methane pool" means anarea that is underlain or appears to be underlain by at least one coalbed capable of producing

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coalbed methane gas.  "Project area" means the well and any gathering pipeline, associated facility, road, and any otherdisturbed area, all of which are permitted as part of a gas, oil, or geophysical operation.  "Restoration" means all activity required to return a permitted site to other use after gas, oil, orgeophysical operations have ended, as approved in the operations plan for the permitted site.  "Royalty owner" means any owner of gas or oil in place, or owner of gas or oil rights, who iseligible to receive payment based on the production of gas or oil.  "State waters" means all water, on the surface and under the ground, that is wholly or partiallywithin or bordering the Commonwealth or within its jurisdiction and that affects the publicwelfare.  "Stimulation" means any action taken by a gas or oil operator to increase the inherentproductivity of a gas or oil well, including fracturing, shooting, or acidizing, but excluding (i)cleaning out, bailing, or workover operations and (ii) the use of surface-tension reducing agents,emulsion breakers, paraffin solvents, or other agents that affect the gas or oil being produced, asdistinguished from the producing formation.  "Storage well" means any well used for the underground storage of gas.  "Surface owner" means any person who is the owner of record of the surface of the land.  "Waste" or "escape of resources" means (i) physical waste, as that term is generally understood inthe gas and oil industry; (ii) the inefficient, excessive, or improper use or unnecessary dissipationof reservoir energy; (iii) the inefficient storing of gas or oil; (iv) the locating, drilling, equipping,operating, or producing of any gas or oil well in a manner that causes or tends to cause areduction in the quantity of gas or oil ultimately recoverable from a pool under prudent andproper operations, or that causes or tends to cause unnecessary or excessive surface loss ordestruction of gas or oil; (v) the production of gas or oil in excess of transportation or marketingfacilities; (vi) the amount reasonably required to be produced in the proper drilling, completing,or testing of the well from which it is produced, except gas produced from an oil well orcondensate well pending the time when with reasonable diligence the gas can be sold orotherwise usefully utilized on terms and conditions that are just and reasonable; or (vii)underground or aboveground waste in the production or storage of gas, oil, or condensate,however caused. "Waste" does not include gas vented from a methane drainage borehole orcoalbed methane gas well where necessary for safety reasons or for the efficient testing andoperation of a coalbed methane gas well, nor does it include the plugging of a coalbed methanegas well for the recovery of the coal estate.  "Waste from gas, oil, or geophysical operations" means any substance other than gas or oil that isproduced or generated during or results from (i) the development, drilling, and completion of anywell and associated facility or the development and construction of gathering pipelines or (ii)well, pipeline, and associated facility operations, including brines and produced fluids other thangas or oil. "Waste from gas, oil, or geophysical operations" includes all rubbish and debris,including all material generated during or resulting from well plugging, site restoration, or theremoval and abandonment of gathering pipelines and associated facilities.  "Water well" means any well drilled, bored, or dug into the earth for the sole purpose ofextracting from it potable, fresh, or usable water for household, domestic, industrial, agricultural,

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or public use.  "Well" means any shaft or hole sunk, drilled, bored, or dug into the earth or into undergroundstrata for the extraction, injection, or placement of any gaseous or liquid substance or any shaftor hole sunk or used in conjunction with such extraction, injection, or placement. "Well" does notinclude any shaft or hole sunk, drilled, bored, or dug into the earth for the sole purpose ofpumping or extracting from it potable, fresh, or usable water for household, domestic, industrial,agricultural, or public use and does not include any water borehole, methane drainage boreholewhere the methane is vented or flared rather than produced and saved, subsurface boreholedrilled from the mine face of an underground coal mine, any other borehole necessary orconvenient for the extraction of coal or drilled pursuant to a uranium exploratory programcarried out pursuant to the laws of the Commonwealth, or any coal or non-fuel mineral core holeor borehole drilled for the purpose of exploration.  1982, c. 347, § 45.1-288; 1984, c. 590; 1987, c. 452; 1988, c. 160; 1990, c. 92, § 45.1-361.1; 1992, c.812; 1993, c. 254; 2015, c. 396;2021, Sp. Sess. I, c. 387.  § 45.2-1601. (Effective October 1, 2021) Regulation of coal surface mining not affected by chapterNothing in this chapter shall be construed as limiting the powers of the Director relating to coalsurface mining operations and reclamation. The provisions of Chapter 10 (§ 45.2-1000 et seq.),including requirements for permits and bonds, shall apply to gas, oil, or geophysical operationslocated on any area for which a coal surface mining permit is in effect and shall be in addition tothe requirements for gas, oil, or geophysical operations set forth in this chapter, except that wellwork and the operation of pipelines on an area that has been reclaimed by the surface mineoperator or the Director shall be treated as postmining uses. The Director shall give specialconsideration to the development and adoption of variances from the postmining userequirements of Chapter 10 for gas, oil, or geophysical operations; however, all such variancesshall be consistent with the provisions of Chapter 10.  1982, c. 347, § 45.1-289; 1984, c. 590; 1990, c. 92, § 45.1-361.2; 2013, cc. 47, 129;2021, Sp. Sess. I,c. 387.  § 45.2-1602. (Effective October 1, 2021) Construction; purposesThe provisions of this chapter shall be liberally construed so as to effectuate the followingpurposes:  1. To foster, encourage, and promote the safe and efficient exploration for and development,production, utilization, and conservation of the Commonwealth's gas and oil resources;  2. To provide a method of gas and oil conservation for maximizing exploration, development,production, and utilization of gas and oil resources;  3. To recognize and protect the rights of any person owning an interest in gas or oil resourcescontained within a pool;  4. To ensure the safe recovery of coal and other minerals;  5. To maximize the production and recovery of coal without substantially affecting the right of agas or oil owner proposing to drill a gas or oil well to explore for and produce gas or oil;  6. To protect the citizens and the environment of the Commonwealth from the public safety andenvironmental risks associated with the development and production of gas or oil; and

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  7. To recognize that the use of the surface for gas or oil development shall be only the use that isreasonably necessary to obtain the gas or oil.  1982, c. 347, § 45.1-290; 1990, c. 92, § 45.1-361.3; 2021, Sp. Sess. I, c. 387.  § 45.2-1603. (Effective October 1, 2021) Virginia Gas and Oil Board; membership; compensationA. The Virginia Gas and Oil Board is established as a policy board in the executive branch of stategovernment. The purpose of the Board is to carry out the provisions of this chapter.  B. The Board shall have a total membership of seven members that shall consist of sixnonlegislative citizen members and one ex officio member. Nonlegislative citizen members ofthe Board shall be appointed to be appointed by the Governor, subject to confirmation by theGeneral Assembly, as follows: one who is a representative of the gas and oil industry and not thecoal industry, one who is a representative of the coal industry and not the gas and oil industry,and four who are not representatives of the gas, oil, or coal industry. The Director or his designeeshall serve ex officio with voting privileges. A chairman shall be designated by the Governor fromamong the membership of the Board.  C. All vacancies occurring on the Board shall be filled in the same manner as the originalappointment within 60 days of the occurrence of the vacancy. The ex officio member of the Boardshall serve terms coincident with such member's term of office. Appointments to fill vacancies,other than by expiration of a term, shall be for the unexpired terms. After the initial staggering ofterms, nonlegislative citizen members shall be appointed for a term of six years from the day onwhich the term of their immediate predecessor expired. All members may be reappointed.Nonlegislative citizen members of the Board shall be citizens of the Commonwealth, and theGovernor shall seek to appoint persons who reside in localities with significant oil or gasproduction or storage.  D. Each member of the Board shall receive compensation for the performance of his duties asprovided in § 2.2-2813. All members shall be reimbursed for all reasonable and necessaryexpenses incurred in the performance of their duties as provided in §§ 2.2-2813 and 2.2-2825.Funding for the costs of compensation and expenses of the members shall be provided by theDepartment.  1982, c. 347, § 45.1-295; 1985, c. 448; 1987, c. 452; 1988, c. 483; 1989, c. 529; 1990, c. 92, § 45.1-361.13; 1998, c. 159;2021, Sp. Sess. I, c. 387.  § 45.2-1604. (Effective October 1, 2021) Duties and responsibilities of the Director; Virginia Gasand Oil InspectorA. The Director has the jurisdiction and authority necessary to enforce the provisions of thischapter. The Director has the power and duty to regulate gas, oil, or geophysical operations,collect fees, and perform other responsibilities prescribed in regulations adopted by theDepartment or the Board.  B. The Director shall appoint the Virginia Gas and Oil Inspector.  1990, c. 92, § 45.1-361.4; 2021, Sp. Sess. I, c. 387.  § 45.2-1605. (Effective October 1, 2021) Exclusivity of regulation and enforcementNo locality or other political subdivision of the Commonwealth shall impose any condition or

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require any other local license, permit, fee, or bond that varies from or is in addition to therequirements of this chapter to perform any gas, oil, or geophysical operation. However, noprovision of this chapter shall be construed to limit or supersede the jurisdiction or requirementsof any other state agency, local land-use ordinance, regulation of general purpose, or § 58.1-3712, 58.1-3713, 58.1-3713.3, 58.1-3713.4, 58.1-3741, 58.1-3742, or 58.1-3743.  1990, c. 92, § 45.1-361.5; 2013, cc. 305, 618;2016, c. 305;2021, Sp. Sess. I, c. 387.  § 45.2-1606. (Effective October 1, 2021) ConfidentialityThe Director shall hold confidential all logs, surveys, and reports relating to the drilling,completion, and testing of a well that are filed by a gas or oil operator under this chapter for aperiod of 90 days after the completion of the well or 18 months after the total depth of the wellhas been reached, whichever occurs first. Upon receipt of a gas, oil, or geophysical operator'swritten request, the Director shall hold confidential such information concerning an exploratorywell or corehole for a period of two years after completion of the well or four years from the datesuch well or hole reaches total depth, whichever occurs first. The Director, for good cause shownby the gas, oil, or geophysical operator, may annually extend the period of time for whichinformation regarding exploratory drilling is held confidential. However, the Director shall uponrequest provide a copy of any survey or log for strata through the lowest coal seam to the coalowner.  1990, c. 92, § 45.1-361.6; 2021, Sp. Sess. I, c. 387.  § 45.2-1607. (Effective October 1, 2021) Expenditure of fundsAll funds, except civil penalties collected pursuant to § 45.2-1608, collected by or appropriated tothe Department pursuant to the provisions of this chapter shall be expended only for the purposeof carrying out the provisions of this chapter.  1990, c. 92, § 45.1-361.7; 2021, Sp. Sess. I, c. 387.  § 45.2-1608. (Effective October 1, 2021) Violations; penaltiesA. Any person who violates or refuses, fails, or neglects to comply with any regulation or order ofthe Board, Director, or Inspector, any condition of a permit, or any provision of this chapter isguilty of a Class 1 misdemeanor.  B. In addition, any person who violates any regulation or order of the Board, Director, orInspector, any condition of a permit, or any provision of this chapter shall upon such finding byan appropriate circuit court be assessed a civil penalty of not more than $10,000 for each day ofsuch violation. All civil penalties under this section shall be recovered in a civil action brought bythe Attorney General in the name of the Commonwealth. The court shall direct that all civilpenalties assessed under this section be paid into the treasury of the county or city where thegas, oil, or geophysical operation determined by the court to be in violation is located.  C. The Board, with the consent of the gas, oil, or geophysical operator, may provide in an orderissued by the Board against such operator for the payment of civil penalties for past violations inspecific sums not to exceed the limit specified in subsection B. Such civil penalties shall beinstead of any appropriate civil penalty that could be imposed under this section and shall not besubject to the provisions of § 2.2-514. Civil penalties collected under this section shall be paidinto the treasury of the county or city where the gas, oil, or geophysical operation subject to theorder issued by the Board is located. 

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1982, c. 347, §§ 45.1-358, 45.1-360; 1984, c. 590; 1990, c. 92, § 45.1-361.8; 2021, Sp. Sess. I, c. 387.  § 45.2-1609. (Effective October 1, 2021) Appeals; venue; standingA. Any order or decision of the Board may be appealed to the appropriate circuit court. Whenevera coal owner, coal operator, gas owner, gas operator, or operator of a gas storage field certificatedby the State Corporation Commission is a party in such action, the court shall hear such appealde novo. The court has the power to enter interlocutory orders as necessary to protect the rightsof all interested parties pending a final decision.  B. Unless the parties otherwise agree, the venue for court review shall be the county or city wherethe gas, oil, or geophysical operation that is the subject of such order or decision is located.  C. The Director and all parties required to be given notice of hearings of the Board pursuant tothe provisions of § 45.2-1618 shall have standing to appeal any order or decision of the Boardthat directly affects them. The permittee or permit applicant, the Director, and those parties withstanding to object pursuant to the provisions of § 45.2-1632 shall have standing to appeal anyorder or decision of the Board that directly affects them. However, except for an aggrieved permitapplicant or the Director, no person shall have standing to appeal a decision of the Boardconcerning a permit application unless such person has previously filed an objection with theDirector pursuant to the provisions of § 45.2-1637. The filing of any petition for appealconcerning the issuance of a new permit that was objected to pursuant to the provisions of §45.2-1611 or 45.2-1612 or by a gas storage field operator who asserts that the proposed well workwill adversely affect the operation of a gas storage field certificated by the State CorporationCommission shall automatically stay the permit until such stay is dissolved or the appeal isdecided by the circuit court. However, in an appeal by a gas storage field operator, suchautomatic stay shall not apply to an oil, gas, or coalbed methane well completed more than 100feet above the cap rock above the storage stratum.  1990, c. 92, § 45.1-361.9; 1997, c. 759;2021, Sp. Sess. I, c. 387.  § 45.2-1610. (Effective October 1, 2021) Copy of lease to lessorAny person who, as either principal or agent, executes a lease of land or right therein for drillingfor gas or oil, or for the development or production of gas or oil, shall furnish a copy of the lease,duly executed by the lessee, to the lessor.  1982, c. 347, § 45.1-352; 1990, c. 92, § 45.1-361.10; 2021, Sp. Sess. I, c. 387.  § 45.2-1611. (Effective October 1, 2021) Objections by coal ownerA. In deciding on objections by a coal owner to a proposed permit modification or drilling unitmodification, only the following questions shall be considered:  1. Whether the work can be done safely with respect to persons engaged in coal mining at or nearthe well site; and  2. Whether the well work is an unreasonable or arbitrary exercise of the well operator's right toexplore for, market, and produce gas or oil.  B. In deciding on objections by a coal owner to the establishment of a drilling unit, the issuanceof a permit for a new well, or the stimulation of a coalbed methane gas well, the following safetyaspects shall first be considered, and no order or permit shall be issued where the evidence

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indicates that the proposed activity will be unsafe:  1. Whether the drilling unit or drilling location is above or in close proximity to any mineopening or shaft, entry, travel way, airway, haulageway, drainageway, or passageway, or to anyproposed extension thereof, in any operated or abandoned or operating coal mine or in any coalmine already surveyed and platted but not yet being operated;  2. Whether the proposed drilling can reasonably be done through an existing or planned pillar ofcoal, or in close proximity to an existing well or such pillar of coal, taking into consideration thesurface topography;  3. Whether the proposed well can be drilled safely or the proposed coalbed methane gas well canbe stimulated safely, taking into consideration the dangers from creeps, squeezes, or otherdisturbances due to the extraction of coal; and  4. The extent to which the proposed drilling unit or drilling location or stimulation of the coalbedmethane gas well unreasonably interferes with the safe recovery of coal, gas, or oil.  C. The following questions with respect to the drilling unit or drilling location of a new well orstimulation of a new coalbed methane gas well shall also be considered:  1. The extent to which the proposed drilling unit or drilling location or coalbed methane gas wellstimulation will unreasonably interfere with present or future coal mining operations;  2. The feasibility of moving the proposed drilling unit or drilling location to a mined-out area, anarea below the coal outcrop, or some other area;  3. The feasibility of a drilling moratorium for not more than two years in order to permit thecompletion of coal mining operations;  4. The methods proposed for the recovery of coal and gas;  5. The practicality of locating the unit or the well on a uniform pattern with other units or wells;  6. The surface topography and use; and  7. Whether the decision will substantially affect the right of the gas operator to explore for andproduce the gas.  D. The factors in subsection C are not intended to and shall not be construed to authorize theDirector, or the Board under § 45.2-1638, to supersede, impair, abridge, or affect any contractualrights or obligations existing between the respective owners of coal and gas or any interesttherein.  1982, c. 347, § 45.1-318; 1990, c. 92, § 45.1-361.11; 2021, Sp. Sess. I, c. 387.  § 45.2-1612. (Effective October 1, 2021) Distance limitations of certain wellsA. If the well operator and the objecting coal owners who are present or represented at a hearingto consider the objections to the proposed drilling unit or location are unable to agree upon adrilling unit or location for a new well within 2,500 linear feet of the location of an existing wellor a well for which a permit application is on file, then the permit or drilling unit shall be refused.  B. The distance limitation established by this section shall not apply if (i) the proposed well willbe drilled through an existing or planned pillar of coal required for protection of a preexisting

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well drilled to any depth and (ii) the proposed well will neither require enlargement of the pillarnor otherwise have an adverse effect on existing or planned coal mining operations.  1982, c. 347, § 45.1-319; 1990, c. 92, § 45.1-361.12; 2021, Sp. Sess. I, c. 387.    Article 2. Gas and Oil Conservation§ 45.2-1613. (Effective October 1, 2021) Meetings of the Board; notice; general powers and dutiesA. The Board shall schedule a monthly meeting at a time and place designated by the chairman.If no petition for action is filed with the Board prior to a meeting, the Board may cancel themeeting. Notification or cancellation of each meeting shall be given in writing to the members bythe chairman at least five days in advance of the meeting. Four members shall constitute aquorum for the transaction of any business that comes before the Board. All determinations ofthe Board shall be by majority vote of the quorum present.  B. The Board has the power necessary to execute and carry out all of its duties specified in thischapter. The Board is authorized to investigate and inspect records and facilities as necessaryand proper to perform its duties under this chapter. The Board may employ personnel andconsultants as necessary to perform its duties under this chapter.  1982, c. 347, § 45.1-296; 1987, c. 452; 1990, c. 92, § 45.1-361.14; 2021, Sp. Sess. I, c. 387.  § 45.2-1614. (Effective October 1, 2021) Additional duties and responsibilities of the BoardA. In executing its duties under this chapter, the Board shall:  1. Foster, encourage, and promote the safe and efficient exploration for and development,production, and conservation of gas and oil resources located in the Commonwealth;  2. Administer a method of gas and oil conservation for the purpose of maximizing exploration,development, production, and utilization of gas and oil resources;  3. Administer procedures for the recognition and protection of the rights of gas or oil ownerswith interests in gas or oil resources contained within a pool;  4. Promote the maximum production and recovery of coal without substantially affecting theright of a gas owner proposing a gas well to explore for and produce gas; and  5. Hear and decide appeals of the Director's decisions and orders issued under Article 3 (§ 45.2-1629 et seq.).  B. Without limiting its general authority, the Board has the specific authority to issue regulationsor orders pursuant to the provisions of the Administrative Process Act (§ 2.2-4000 et seq.) inorder to:  1. Prevent waste through the design, spacing, or unitization of wells, pools, or fields.  2. Protect correlative rights.  3. Enter spacing and pooling orders.  4. Establish drilling units.  5. Establish maximum allowable production rates for the prevention of waste and the protectionof correlative rights.

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  6. Provide for the maximum recovery of coal.  7. Classify pools and wells as gas, oil, gas and oil, or coalbed methane gas.  8. Collect data, make investigations and inspections, examine property, leases, papers, books,and records, and require or provide for the keeping of records and the making of reports.  9. Set application fees.  10. Govern practices and procedures before the Board.  11. Require additional data from parties to any hearing.  12. Take actions reasonably necessary to carry out the provisions of this chapter.  1982, c. 347, § 45.1-296; 1987, c. 452; 1990, c. 92, § 45.1-361.15; 2021, Sp. Sess. I, c. 387.  § 45.2-1615. (Effective October 1, 2021) Applicability and constructionA. The provisions of this article apply to all lands in the Commonwealth, whether publicly orprivately owned. However, no well commenced prior to July 1, 1990, shall be required to beplugged or abandoned solely for purposes of complying with the conservation provisions of thisarticle.  B. No provision of this article shall be construed to grant to the Board the authority or power tofix prices of gas or oil.  1982, c. 347, § 45.1-300; 1987, c. 452; 1990, c. 92, § 45.1-361.16; 2021, Sp. Sess. I, c. 387.  § 45.2-1616. (Effective October 1, 2021) Statewide spacing of wellsA. Unless prior approval has been received from the Board or a provision of the field or pool rulesso allows:  1. No well drilled in search of oil shall be located closer than 1,250 feet to any well completed inthe same pool; however, this spacing requirement is subject to § 45.2-1612;  2. No well drilled in search of gas shall be located closer than 2,500 feet to any other wellcompleted in the same pool or closer than 2,500 feet to any storage well within the boundary of agas storage field certificated by the State Corporation Commission prior to January 1, 1997, if thewell to be drilled is to be completed within the same horizon as the certificated gas storage field;and  3. No well shall be drilled closer to the boundary of the acreage supporting the well, whether suchacreage is a single leasehold or other tract or a contractual or statutory drilling unit, than one-half of the applicable minimum well spacing distance prescribed in this section.  B. Unless prior approval has been received from the Board or a provision of the field or pool rulesso allows:  1. No well drilled in search of coalbed methane gas shall be located closer than 1,000 feet to anyother coalbed methane gas well, or in the case of a coalbed methane gas well located in the gob,closer than 500 feet to any other coalbed methane gas well located in the gob.  2. No coalbed methane gas well shall be drilled closer than 500 feet, or in the case of a well

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located in the gob, closer than 250 feet, from the boundary of the acreage supporting the well,whether such acreage is a single leasehold or other tract or a contractual or statutory drillingunit.  3. The spacing limitations set forth in this subsection are subject to the provisions of §§ 45.2-1611 and 45.2-1612.  1990, c. 92, § 45.1-361.17; 1996, c. 854;1997, c. 759;2021, Sp. Sess. I, c. 387.  § 45.2-1617. (Effective October 1, 2021) Voluntary pooling of interests in drilling units; validityof unit agreementsA. If two or more separately owned tracts are embraced within a drilling unit, or if there areseparately owned interests in all or a part of any such drilling unit, the gas or oil owners owningsuch interests may pool their interests for the development and operation of the drilling unit byvoluntary agreement. Such agreement may be based on the exercise of pooling rights or rights toestablish drilling units that are granted in any gas or oil lease.  B. No voluntary pooling agreement between or among gas or oil owners shall be held to violatethe statutory or common law of the Commonwealth that prohibits monopolies or acts,arrangements, contracts, combinations, or conspiracies in restraint of trade or commerce.  1982, c. 347, § 45.1-302; 1987, c. 452; 1989, c. 529; 1990, c. 92, § 45.1-361.18; 2021, Sp. Sess. I, c.387.  § 45.2-1618. (Effective October 1, 2021) Notice of hearing; standing; form of hearingA. Any person who applies for a hearing in front of the Board pursuant to the provisions of §45.2-1619, 45.2-1620, or 45.2-1622 shall simultaneously with the filing of such applicationprovide notice by commercial delivery service, return receipt requested, or certified mail, returnreceipt requested, to each gas or oil owner, coal owner, or mineral owner having an interestunderlying the tract that is the subject of the hearing and to the operator of any gas storage fieldcertificated by the State Corporation Commission as a public utility facility whose certificatedarea includes the tract that is the subject of the hearing. Whenever a hearing applicant is unableto provide such written notice because the identity or location of a person to whom notice isrequired to be given is unknown, the hearing applicant shall promptly notify the Board of suchinability.  B. At least 10 days prior to a hearing, the Board shall publish its agenda in a newspaper of generalcirculation in each locality where the lands that are the subject of the hearing are located. Theagenda shall include the name of each applicant, the locality where the lands that are the subjectof the hearing are located, the purpose of the hearing, and the date, time, and location of thehearing.  C. The Board shall conduct all hearings on any application made to it pursuant to the formallitigated issues hearing provisions of the Administrative Process Act (§ 2.2-4000 et seq.). Theapplicant and any person to whom notice is required to be given pursuant to subsection A shallhave standing to be heard at the hearing. The Board shall render its decision on such applicationwithin 30 days of the hearing's closing date and shall provide notification of its decision to allparties to the hearing pursuant to the provisions of the Administrative Process Act.  1982, c. 347, § 45.1-304; 1989, c. 529; 1990, c. 92, § 45.1-361.19; 1997, c. 759;2008, c. 534;2019, c.351;2021, Sp. Sess. I, c. 387.

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  § 45.2-1619. (Effective October 1, 2021) Field rules and drilling units for wells; hearings andordersA. In order to prevent the waste of gas or oil or the drilling of unnecessary wells or to protectcorrelative rights, the Board on its own motion or upon application of the gas or oil owner mayestablish or modify drilling units. Drilling units, to the extent reasonably possible, shall be ofuniform shape and size for an entire pool. Any gas, oil, or royalty owner may apply to the Boardfor the establishment of field rules and the creation of drilling units for the field. Unless suchmotion is made or an application is received at least 30 days prior to the next regularly scheduledmonthly meeting of the Board, it shall not be heard by the Board at such meeting and shall beheard at the next meeting of the Board thereafter.  B. At any hearing of the Board regarding the establishment or modification of drilling units, theBoard shall make the following determinations:  1. Whether the proposed drilling unit is an unreasonable or arbitrary exercise of a gas or oilowner's right to explore for or produce gas or oil;  2. Whether the proposal would unreasonably interfere with the present or future mining of coalor other minerals;  3. The acreage to be included in the order;  4. The acreage to be embraced within each drilling unit and its shape;  5. The area within which wells may be drilled on each unit; and  6. The allowable production of each well.  C. In establishing or modifying a drilling unit for coalbed methane gas wells, and in order toaccommodate the unique characteristics of coalbed methane development, the Board shallrequire that drilling units conform to the mine development plan, if any. If requested by the coaloperator, well spacing shall correspond with mine operations, including the drilling of multiplecoalbed methane gas wells on each drilling unit.  D. If an order to establish or modify a drilling unit will allow a well to be drilled into or through acoal seam, any coal owner within the area to be covered by the drilling unit may object to theestablishment of the drilling unit. Upon a coal owner's objection, and without superseding,impairing, abridging, or affecting any contractual rights or obligations existing between coal andgas owners, the Board shall make its determination in accordance with the provisions of §§ 45.2-1611 and 45.2-1612.  E. The Board may continue a hearing to its next meeting to allow for further investigation andthe gathering and taking of additional data and evidence. If at the time of a hearing there is notsufficient evidence for the Board to determine field boundaries, drilling unit size or shape, orallowable production, the Board may enter a temporary order establishing provisional drillingunits, field boundaries, and allowable production for the orderly development of the poolpending receipt of the information necessary to determine the ultimate pool boundaries, spacingof wells for the pool, and allowable production. Upon additional findings of fact, the boundariesof a pool, drilling units for the pool, and allowable production may be modified by the Board.  F. Unless otherwise provided for by the Board, after an application for a hearing to establish or

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modify drilling units or pool boundaries has been filed, no additional well shall be permitted inthe pool until the Board's order establishing or modifying the pool or units has been entered.  G. After the Board issues a field or pool spacing order that creates drilling units or a pattern ofdrilling units for a pool, if a gas or oil owner applies for a permit or otherwise indicates his desireto drill a well outside of such drilling units or pattern of drilling units and thereby potentiallyextend the pool, the Board may, on its own motion or the motion of any interested person,require that the well be located and drilled in compliance with the provisions of the orderaffecting the pool.  1982, c. 347, § 45.1-301; 1987, c. 452; 1989, c. 529; 1990, c. 92, § 45.1-361.20; 2021, Sp. Sess. I, c.387.  § 45.2-1620. (Effective October 1, 2021) Pooling of interests in drilling unitsA. The Board, upon application from any gas or oil owner, shall enter an order pooling allinterests in a drilling unit for the development and operation thereof when:  1. Two or more separately owned tracts are embraced in a drilling unit;  2. There are separately owned interests in all or part of any such drilling unit and those ownershaving interests have not agreed to pool their interests; or  3. There are separately owned tracts embraced within the minimum statewide spacingrequirements prescribed in § 45.2-1616.  However, no pooling order shall be entered until the notice and hearing requirements of thisarticle have been satisfied.  B. Subject to any contrary provision contained in a gas or oil lease regarding the property, gas oroil operations incident to the drilling of a well on any portion of a unit covered by a pooling ordershall be deemed to be the conduct of such operations on each tract in the unit. The portion ofproduction allocated to any tract covered by a pooling order shall be in the same proportion asthe acreage of that tract bears to the total acreage of the unit.  C. Every pooling order entered by the Board pursuant to the provisions of this section shall:  1. Authorize the drilling and operation of a well, including the stimulation of all coal seams inthe case of a coalbed methane well when authorized pursuant to clause (iii) of subdivision F 2 bof § 45.2-1631, subject to the permit provisions contained in Article 3 (§ 45.2-1629 et seq.);  2. Include the time and date when such order expires;  3. Designate the gas or oil owner who is authorized to drill and operate the well. Except in thecase of a coalbed methane gas well, such designated operator shall possess the right to conductoperations or possess the written consent of owners with the right to conduct operations on atleast 25 percent of the acreage included in the unit;  4. Prescribe the conditions under which a gas or oil owner may become a participating operatoror exercise a right of election under subdivision 7;  5. Establish the sharing of all reasonable costs, including a reasonable supervision fee, betweenparticipating operators so that each participating operator pays the same percentage of suchcosts as his acreage bears to the total unit acreage;

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  6. Require that any nonleasing gas or oil owner be provided with reasonable access to unitrecords submitted to the Director or Inspector;  7. Establish a procedure for a gas or oil owner who received notice of the hearing but does notdecide to become a participating operator to elect to (i) sell or lease his gas or oil ownership to aparticipating operator, (ii) enter into a voluntary agreement to share in the operation of the wellat a rate of payment mutually agreed to by the gas or oil owner and the gas or oil operatorauthorized to drill the well, or (iii) share in the operation of the well as a nonparticipatingoperator on a carried basis after the proceeds allocable to his share equal the following:  a. In the case of a leased tract, 300 percent of the share of such costs allocable to his interest; or  b. In the case of an unleased tract, 200 percent of the share of such costs allocable to his interest.  D. Any gas or oil owner whose identity and location remain unknown at the conclusion of ahearing concerning the establishment of a pooling order for which public notice was given shallbe deemed to have elected to lease his interest to the gas or oil operator at a rate to beestablished by the Board. The Board shall cause to be established an escrow account into whichthe unknown lessor's share of proceeds shall be paid and held for his benefit. Such escrowedproceeds shall be deemed to be unclaimed property and shall be disposed of pursuant to theprovisions of the Virginia Disposition of Unclaimed Property Act (§ 55.1-2500 et seq.). Upondiscovery of the identity and location of any unknown owner of an interest that is subject toescrow under the provisions of this subsection and is not subject to conflicting claims ofownership, the designated operator shall, within 30 days, file with the Board a petition fordisbursement of funds to be considered at the next available hearing. The petition shall include adetailed accounting of all funds deposited in escrow that are subject to the proposeddisbursement.  E. Any person who does not make an election under the pooling order shall be deemed to haveleased his gas or oil interest to the gas or oil well operator as the pooling order provides.  F. If a gas or oil owner is a person under a disability, the applicant for a pooling order maypetition the appropriate circuit court to appoint a guardian ad litem pursuant to the provisions of§ 8.01-261 for purposes of making the election provided for by this section.  G. Any royalty or overriding royalty reserved in any lease that is deducted from anonparticipating operator's share of production shall not be subject to charges for operatingcosts but shall be separately calculated and paid to the royalty owner.  H. The Board shall resolve all disputes arising among gas or oil operators regarding the amountand reasonableness of well operation costs. The Board shall, by regulation, establish allowabletypes of costs that may be shared in pooled gas or oil operations.  1982, c. 347, § 45.1-302; 1987, c. 452; 1989, c. 529; 1990, c. 92, § 45.1-361.21; 1995, c. 269;1996,c. 854;2006, c. 498;2021, Sp. Sess. I, c. 387.  § 45.2-1621. (Effective October 1, 2021) Coalbed methane gas; ownershipNo conveyance, reservation, or exception of coal shall be deemed to include coalbed methanegas. Nothing in this section shall affect a coal operator's right to vent coalbed methane gas forsafety purposes or release coalbed methane gas in connection with mining operations. Theprovisions of this section shall not affect any settlement of any dispute, or any judgment or

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governmental order, as to the ownership or development of coalbed methane gas made orentered into prior to April 13, 2010.  2010, cc. 730, 762, § 45.1-361.21:1; 2021, Sp. Sess. I, c. 387.  § 45.2-1622. (Effective October 1, 2021) Pooling of interests for coalbed methane gas wells;conflicting claims to ownershipA. If there are conflicting claims to the ownership of coalbed methane gas, the Board, uponapplication from any claimant, shall enter an order pooling all interests or estates in the coalbedmethane gas-drilling unit for the development and operation thereof.  B. In addition to the provisions of § 45.2-1620, the following provisions shall apply to the orderprovided in subsection A:  1. Simultaneously with the filing of such application, the gas or oil owner applying for the ordershall provide notice pursuant to the provisions of § 45.2-1618 to each person identified by theapplicant as a potential owner of an interest in the coalbed methane gas underlying the tract thatis the subject of the hearing.  2. The Board shall cause to be established an escrow account into which the payment for costs orproceeds attributable to the conflicting interests shall be deposited and held for the interest ofthe claimants.  3. The coalbed methane gas well operator shall deposit into the escrow account any money paidby a person claiming a contested ownership interest as a participating operator's share of costspursuant to the provisions of § 45.2-1620 and the order of the Board.  4. The coalbed methane gas well operator shall deposit into the escrow account one-eighth of allproceeds attributable to the conflicting interests plus all proceeds in excess of ongoingoperational expenses attributable to a participating or nonparticipating operator as provided forunder § 45.2-1620 and the order of the Board.  5. The Board shall order payment of principal and accrued interest, less escrow account fees,from the escrow account to conflicting claimants only after (i) a final decision of a court ofcompetent jurisdiction adjudicating the ownership of coalbed methane gas as between them isissued, (ii) a determination is reached by an arbitrator pursuant to § 45.2-1623, or (iii) anagreement is reached among all claimants owning conflicting estates in the tract in question orany undivided interest therein. Upon receipt of an affidavit from conflicting claimants affirmingsuch decision, determination, or agreement, the designated operator shall, within 30 days, filewith the Board a petition for disbursement of funds on behalf of the conflicting claimants. Thepetition shall include a detailed accounting of all funds deposited in escrow that are subject tothe proposed disbursement. The amount to be paid to the conflicting claimants shall bedetermined on the basis of (a) the percentage of ownership interest of the conflicting claimantsas shown in the operator's supplemental filing, made part of the pooling order that establishedthe escrow account; (b) the operator's records of deposits attributable to those tracts for whichfunds are being requested; and (c) the records of the escrow account for the coalbed methanegas-drilling unit. The petition for disbursement shall be placed on the first available Boarddocket. Funds shall be disbursed within 30 days after the Board decision and receipt by theDepartment of all documentation required by the Board. The interests of any cotenants that havenot been resolved by the agreement or by judicial decision shall remain in the escrow account. 

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6. Any person who does not make an election under the pooling order shall be deemed, subject toa final legal determination of ownership, to have leased his gas or oil interest to the coalbedmethane gas well operator as provided in the pooling order.  1990, c. 92, § 45.1-361.22; 1999, c. 122;2006, c. 498;2010, c. 442;2021, Sp. Sess. I, c. 387.  § 45.2-1623. (Effective October 1, 2021) Conflicting claims of ownership; arbitrationA. The Board shall enter an order requiring that the matter of disputed ownership be submittedto arbitration and notify the circuit court in the jurisdiction in which the majority of the subjecttract is located (i) upon written request from all claimants to the ownership of coalbed methanegas related to the subject tract under § 45.2-1622;(ii) upon receipt of an affidavit executed by allsuch claimants affirming that there is no other known surface owner, gas or oil owner, coalowner, mineral owner, or operator of a gas storage field certificated by the State CorporationCommission having an interest underlying the subject tract; (iii) after a hearing noticed pursuantto subsection B of § 45.2-1618;and (iv) upon a determination by the Department whethersufficient funds are available to pay the estimated costs of the arbitration pursuant to subsectionF. Within 30 days of receipt of the notice from the Board, the circuit court shall appoint anattorney from the list maintained by the Department pursuant to subsection C or, at thediscretion of the court, another attorney meeting the qualifications set forth in subsection C.Prior to his appointment as an arbitrator of a particular dispute, the attorney shall certify to thecircuit court that he has not derived more than 10 percent of his income during any of thepreceding three years from any (a) claimants asserting ownership or rights in the subject tract or(b) affiliated entities or immediate family members of such claimants. If the attorney cannotprovide such certification, he shall notify the circuit court and he will be disqualified fromserving as arbitrator for that particular dispute.  B. The Department shall send notice to all claimants if it determines that there are insufficientfunds to pay the estimated costs of the arbitration pursuant to subsection F. The claimants may,by unanimous agreement, proceed with the arbitration process, notify the Board of suchagreement, and bear the costs to the extent of the insufficiency. If the parties do not agree, thearbitration shall be delayed until such funds are available.  C. To be qualified as an arbitrator, a candidate shall (i) be an attorney licensed in theCommonwealth; (ii) have at least 10 years of experience in real estate law, including substantialexpertise in mineral title examination; and (iii) disclose to the Board whether he has beenengaged within the preceding three years by any person in a matter subject to the jurisdiction ofthe Board or the Department under this chapter. The Department shall solicit applications fromattorneys meeting the qualifications set forth in this subsection and maintain a list of attorneysqualifying as arbitrators for use by the circuit courts. The Department shall update its list at leastonce annually. To maintain qualification, each attorney whose name appears on the list shallupdate annually his disclosures as set forth in clause (iii).  D. The arbitrator shall determine a time and place for the arbitration hearing and cause writtennotification of such hearing to be served on each surface owner, gas or oil owner, coal owner,mineral owner, or operator of a gas storage field certificated by the State CorporationCommission having an interest underlying the tract that is the subject of the hearing. Partiesshall be served personally or by certified mail, return receipt requested, not less than 14 daysbefore the hearing. Appearance at the hearing waives such party's right to challenge notice. Anyparty to the arbitration has the right to representation before the arbitrator pursuant to § 8.01-

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581.05. In accordance with § 8.01-581.06, the arbitrator may issue subpoenas for the attendanceof witnesses and for the production of books, records, documents, and other evidence; administeroaths; and, upon application by a party to the arbitration, permit the taking of depositions foruse as evidence. The arbitrator shall hear and determine the controversy upon the evidence andconsistent with applicable law, notwithstanding the failure of a party to appear at the hearing.  E. The arbitrator shall issue his determination as to the ownership in the coalbed methane gasand entitlement to proceeds held in escrow within six months from the order of the Boardrequiring the matter be submitted to arbitration, unless a longer period is otherwise agreed to byall parties. Such determination shall be in writing and sent to the Board and to each party towhom notice is required to be given under subsection D.  F. Upon the issuance of the arbitrator's determination of ownership and subject to the availabilityof funds, the fees and expenses of the arbitration, but not including fees or costs of counselengaged by the respective claimants or any other costs of the claimants, shall be paid from theaccrued interest on general escrow account funds.  G. An arbitrator's determination rendered pursuant to subsection E shall be binding upon theparties, and upon request of any party to the arbitration such determination may be entered asthe judgment of the circuit court responsible for appointing the arbitrator under subsection A.  H. Upon application of any party to the arbitration, a determination rendered pursuant tosubsection E may be confirmed, vacated, corrected, or appealed pursuant to the grounds set forthin Chapter 21 (§ 8.01-577 et seq.) of Title 8.01.  2010, c. 442, § 45.1-361.22:1; 2021, Sp. Sess. I, c. 387.  § 45.2-1624. (Effective October 1, 2021) Release of funds held in escrow or suspense because ofconflicting claims to coalbed methane gasA. For a coalbed methane gas well that was force-pooled prior to July 1, 2015, the coalbedmethane gas well operator shall, on or before January 1, 2016, apply to the Board for the releaseof the funds in escrow and give written notice of such application to every conflicting claimantidentified in the pooling orders, or to the successor of such claimant where the successor isknown to the coalbed methane gas well operator or has identified himself to the coalbedmethane gas well operator or the Board. Such notice shall be in accordance with the applicableprovisions of § 45.2-1618 and, if any unknown person or unlocatable conflicting claimant issubject to escrow, such notice shall also be published in a newspaper of general circulation in thecounty or counties where the drilling unit is located once each week for four successive weeks.The application shall include a detailed accounting in accordance with subdivision B 5 of § 45.2-1622. The Board shall order payment of the principal and accrued interest, less escrow accountfees, held in escrow, along with all future royalties attributable to the drilling unit, to each gasclaimant identified in the pooling order unless, within 45 days of the coalbed methane gas welloperator's notice of its application, the coal claimant provides the Board and the coalbedmethane gas well operator with evidence of a proceeding or agreement. The Board, pursuant toits authority granted by § 45.2-1614, may extend the time for filing the application and delay thepayment of funds for a gas title conflict, the existence of an unknown gas claimant, the existenceof an unlocatable gas claimant, an unresolved gas heirship issue, or any other reason beyond thereasonable control of the coalbed methane gas well operator and shall not order payment if thegas claimant fails to provide the Board with information needed under applicable law orregulation to distribute the funds.

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  B. For a coalbed methane gas well force-pooled on or after July 1, 2015, the Board, in its poolingorder, shall direct the coalbed methane gas well operator to pay royalties to the gas claimantunless the coal claimant provides the coalbed methane gas well operator and the Board withevidence of a proceeding or agreement not later than the time and place of the pooling hearing.The coalbed methane gas well operator shall provide written notice of the hearing to every gasclaimant and coal claimant in accordance with § 45.2-1618. However, the Board, pursuant to itsauthority granted by § 45.2-1614, shall not order the coalbed methane gas well operator to makepayment to a gas claimant if there exists any gas title conflict, unknown gas claimant,unlocatable gas claimant, unresolved gas heirship issue, or other reason beyond the reasonablecontrol of the coalbed methane gas well operator or if the gas claimant fails to provide thecoalbed methane gas well operator with the information required under applicable law orregulation to pay royalties. If the Board so declines to order payment to be made to a gasclaimant, the coalbed methane gas well operator shall provide each affected gas claimant and theBoard with written notice of the reason payment is not required to be made in accordance withthe applicable provisions of § 45.2-1618. If payment is not required to be made due to the gasclaimant's failure to provide needed information under applicable law or regulation, the noticeshall identify the information that is needed to enable the payment to be made.  C. For a coalbed methane gas well voluntarily pooled at any time, the coalbed methane gas welloperator shall pay royalties, including past royalties held, to each gas claimant unless, within 45days of the coalbed methane gas well operator's provision of written notice to the coal claimantthat the operator will be paying royalties to the gas claimants, the coal claimant provides thecoalbed methane gas well operator and each gas claimant with evidence of a proceeding oragreement. For any unit voluntarily pooled before July 1, 2015, the coalbed methane gas welloperator shall provide such written notice to each gas claimant and coal claimant on or beforeJanuary 1, 2016. For any unit voluntarily pooled on or after July 1, 2015, the coalbed methane gaswell operator shall provide such written notice to each gas claimant and coal claimant not laterthan 45 days after production commences. However, the coalbed methane gas well operator shallnot be required to make payment to a gas claimant if there exists any gas title conflict, unknowngas claimant, unlocatable gas claimant, unresolved gas heirship issue, or other reason beyond thereasonable control of the coalbed methane gas well operator or if the gas claimant fails toprovide the coalbed methane gas well operator with information to process or pay royalties. Ifthe Board so declines to order payment to be made to a gas claimant, the coalbed methane gaswell operator shall provide each affected gas claimant with written notice of the reason paymentis not required to be made in accordance with the applicable provisions of § 45.2-1618. Ifpayment is not required to be made due to a gas claimant's failure to provide neededinformation, the notice shall identify the information that is needed to enable the payment to bemade.  D. Any pending judicial or arbitration proceeding shall be pursued by the coal claimant withdiligence and shall not be voluntarily dismissed or nonsuited without the consent of the gasclaimant. No default judgment shall be entered against a gas claimant in such proceeding.Royalties shall be paid as determined by the final order in the proceeding. A prevailing gasclaimant may recover from the nonprevailing coal claimant reasonable costs and attorney fees ifsuch gas claimant substantially prevails on the merits of the case and the coal claimant's positionis not substantially justified.  E. A coalbed methane gas well operator paying funds to a gas claimant in accordance with this

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section shall have no liability to a coal claimant for the payments made by the coalbed methanegas well operator to a gas claimant.  F. This section shall not operate to extinguish any other right or cause of action or defensethereto, including any claim for an accounting or claim under § 8.01-31. Nothing in this sectionshall create, confer, or impose a fiduciary duty.  2015, c. 396, § 45.1-361.22:2; 2021, Sp. Sess. I, c. 387.  § 45.2-1625. (Effective October 1, 2021) Appeals of the Director's decisions; notices; hearings andordersA. With the exception of an aggrieved permit applicant, no person shall have standing to appeal adecision of the Director to the Board concerning a new permit application unless such person haspreviously filed an objection with the Director pursuant to the provisions of § 45.2-1637.  B. When a person applies for a hearing to appeal a decision of the Director to the Board, theBoard shall, at least 20 days prior to the hearing, give notice by certified mail, return receiptrequested, to the person making the appeal and, if different, to the gas or oil operator subject tothe appeal.  C. Upon submittal of the petition for appeal of a decision of the Director to the Board, theDirector shall forward to the Board (i) the permit application or order and associated documents;(ii) all required notices; and (iii) the written objections, proposals, and claims recorded duringthe informal fact-finding hearing.  D. In any appeal involving a permit for a new well that was objected to (i) pursuant to theprovisions of § 45.2-1611 or 45.2-1612 or (ii) by a gas storage field operator who asserts that theproposed well work will adversely affect the operation of a gas storage field certificated by theState Corporation Commission, the filing of a petition for appeal shall stay any permit until thecase is decided by the Board or the stay is dissolved by a court of record. However, in an appeal bya gas storage field operator, such automatic stay shall not apply to any oil, gas, or coalbedmethane well completed more than 100 feet above the cap rock above the storage stratum. In anyother appeal, the Director may order the permit or other decision stayed for good cause shownuntil the case is decided by the Board or the stay is dissolved by a court of record. An appealbased on an alleged risk of danger to any person not engaged in the gas or oil operations shall beprima facie proof of good cause for a stay.  E. The Board shall conduct all hearings under this section in accordance with the formal litigatedissues hearing provisions of Article 3 (§ 2.2-4018 et seq.) of the Administrative Process Act.However, any person to whom notice is required to be given pursuant to subsection B shall havestanding to be heard at the hearing. The Board shall render its decision on such appeals within 30days of the hearing's closing date and shall provide notification of its decision to all partiespursuant to the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).  1990, c. 92, § 45.1-361.23; 1997, c. 759;2021, Sp. Sess. I, c. 387.  § 45.2-1626. (Effective October 1, 2021) EnforcementThe Director shall enforce the provisions of this article pursuant to the provisions of Article 3 (§45.2-1629 et seq.). In addition, if any person violates or threatens to violate any provision of thisarticle, regulation adopted thereunder, or order of the Board, the Board may maintain suit torestrain any such violation or threatened violation.

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  1982, c. 347, § 45.1-306; 1990, c. 92, § 45.1-361.24; 2021, Sp. Sess. I, c. 387.  § 45.2-1627. (Effective October 1, 2021) Standing when Director or Board fails to actIf the Director or Board fails to take enforcement action within 10 days of the Board's receipt of apetition alleging that the petitioner is or will be adversely affected by a violation or threatenedviolation of any provision of this article, regulation adopted thereunder, or order of the Board,the petitioner shall have standing to file a complaint in the appropriate circuit court. The Board,in addition to the person violating or threatening to violate the provision of this article,regulation adopted thereunder, or order of the Board, shall be made a party to any such action.  1982, c. 347, § 45.1-307; 1990, c. 92; 2021, Sp. Sess. I, c. 387.  § 45.2-1628. (Effective October 1, 2021) Recording of ordersThe Inspector shall cause a true copy of any order entered by the Board that establishes a drillingunit or pools any interests to be recorded in the office of the clerk of the circuit court of eachlocality wherein any portion of the relevant drilling unit is located. Such order shall be recordedin the record book in which gas or oil leases are normally recorded. The sole charge forrecordation shall be a tax equal to $10 plus $1 per page of the order. From the time noted on therecordation by the clerk, the recordation shall be notice of the order to all persons.  1982, c. 347, § 45.1-308; 1990, c. 92, § 45.1-361.25; 2021, Sp. Sess. I, c. 387.    Article 3. Regulation of Gas and Oil Development and Production§ 45.2-1629. (Effective October 1, 2021) Duties, responsibilities, and authority of the DirectorA. The Director shall adopt and enforce regulations and orders necessary to ensure the safe andefficient development and production of gas and oil resources located in the Commonwealth.Such regulations and orders shall be designed to:  1. Prevent pollution of state waters and require compliance with the water quality standardsadopted by the State Water Control Board;  2. Protect against offsite disturbances from gas, oil, or geophysical operations;  3. Ensure the restoration of all sites disturbed by gas, oil, or geophysical operations;  4. Prevent the escape of the Commonwealth's gas and oil resources;  5. Provide for safety in coal and mineral mining and coalbed methane well and related facilityoperations;  6. Control wastes from gas, oil, or geophysical operations;  7. Provide for the accurate measurement of gas and oil production and delivery to the first pointof sale; and  8. Protect the public safety and general welfare.  B. In adopting regulations and when issuing orders for the enforcement of the provisions of thisarticle, the Director shall consider the following factors:  1. The protection of the citizens and environment of the Commonwealth from the public safetyand environmental risks associated with the development and production of gas or oil;

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  2. The means of ensuring the safe recovery of coal and other minerals without substantiallyaffecting the right of coal, minerals, gas, oil, or geophysical operators to explore for and producecoal, minerals, gas, or oil; and  3. The protection of safety and health on permitted sites for coalbed methane wells and relatedfacilities.  C. In adopting regulations and orders, the Director may set and enforce standards governing thefollowing: gas or oil ground-disturbing geophysical exploration; the development, drilling,casing, equipping, operating, and plugging of gas or oil production, storage, enhanced recovery,or disposal wells; the development, operation, and restoration of site disturbances for wells,gathering pipelines, and associated facilities; and gathering pipeline safety.  D. Whenever the Director determines that an emergency exists, he shall issue an emergencyorder without advance notice or hearing. Such order shall have the same validity as an orderissued with advance notice and hearing but shall remain in force no longer than 30 days from itseffective date. After issuing an emergency order, the Director shall promptly notify the public ofthe order by publication and hold a public hearing for the purposes of modifying, repealing, ormaking permanent the emergency order. An emergency order shall prevail as against a generalregulation or order when in conflict with it. Emergency orders shall apply to gas, oil, orgeophysical operations and to particular fields, geographical areas, subject areas, subjectmatters, or situations.  E. The Director also may:  1. Issue, condition, and revoke permits;  2. Issue notices of violation and orders upon the violation of any provision of this chapter orregulation adopted thereunder;  3. Issue closure orders in cases of imminent danger to persons or damage to the environment orupon a history of violations;  4. Require or forfeit bonds or other financial securities;  5. Prescribe the nature of and form for the presentation of any information or documentationrequired by any provision of this article or regulation adopted thereunder;  6. Maintain suit in the county or city where a violation has occurred or is threatened or wherevera person who has violated or threatens to violate any provision of this chapter is found in orderto restrain the actual or threatened violation;  7. At reasonable times and under reasonable circumstances, enter upon any property and takeaction as necessary to administer and enforce the provisions of this chapter; and  8. Inspect and review all properties and records thereof as necessary to administer and enforcethe provisions of this chapter.  F. The Director has no jurisdiction to hear objections with respect to any matter subject to thejurisdiction of the Board as set out in Article 2 (§ 45.2-1613 et seq.). Such objections shall bereferred to the Board in a manner prescribed by the Director. 

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1982, c. 347, §§ 45.1-315, 45.1-316, 45.1-317; 1987, c. 452; 1989, c. 529; 1990, c. 92, § 45.1-361.35; 1996, c. 854;1998, c. 228;2002, c. 277;2021, Sp. Sess. I, c. 387.  § 45.2-1630. (Effective October 1, 2021) Powers, duties, and responsibilities of the InspectorA. The Inspector shall administer the laws and regulations and shall have access to all recordsand properties necessary for this purpose. He shall perform all duties delegated by the Directorpursuant to § 45.2-105 and maintain permanent records of the following:  1. Each application for a gas, oil, or geophysical operation and each permitted gas, oil, orgeophysical operation;  2. Meetings, actions, and orders of the Board;  3. Each petition for mining coal within 200 feet of or through a well;  4. Each request for special plugging by a coal owner or coal operator; and  5. All other records prepared pursuant to this chapter.  B. The Inspector or another Department employee as determined by the Director shall serve asthe principal executive of the staff of the Board.  C. The Inspector may take charge of well or corehole operations or pipeline emergencyoperations whenever a well or corehole blowout, release of hydrogen sulfide or other gas, orother serious accident occurs.  1982, c. 347, § 45.1-293; 1987, c. 452; 1989, c. 164; 1990, c. 92, § 45.1-361.28; 2021, Sp. Sess. I, cc.387, 532.  § 45.2-1631. (Effective October 1, 2021) Permit required; gas, oil, or geophysical operations;coalbed methane gas wells; environmental assessmentA. No person shall commence any ground-disturbing activity for a well, gathering pipeline,geophysical exploration, or associated activity, facility, or structure without first having obtainedfrom the Director a permit to conduct such activity. Every permit application or permitmodification application filed with the Director shall be verified by the permit applicant and shallcontain all data, maps, plats, plans, and other information as required by regulation or theDirector.  B. For each permit issued on or after July 1, 1996, a new permit issued by the Director shall beissued only for the following activities: geophysical operations, drilling, casing, equipping,stimulating, producing, reworking an initially productive zone, plugging a well, or constructionand operation of a gathering pipeline. An application for a new permit to conduct geophysicaloperations shall be accompanied by an application fee of $130. An application for a new permitfor any other activity shall be accompanied by an application fee of $600.  C. For a permit issued prior to July 1, 1996, prior to commencing any reworking, deepening, orplugging of a well, or other activity not previously approved on the permitted site, a permitteeshall first obtain a permit modification from the Director. Each application for a permitmodification shall be accompanied by a permit modification fee of $300. For a permit issued onor after July 1, 1996, prior to commencing any new zone completion, a permittee shall firstobtain a permit modification from the Director. 

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D. Every permit and all operations provided for under this section shall conform to theregulations and orders of the Director and the Board. If permit terms or conditions required orprovided for under this article are in conflict with any provision of a conservation order issuedpursuant to the provisions of Article 2 (§ 45.2-1613 et seq.), the terms or conditions of the permitshall control. In such event, the operator shall return to the Board for reconsideration of theconservation order in light of the conflicting permit. Every permittee shall be responsible for alloperations, activities, or disturbances associated with the permitted site.  E. No permit or permit modification shall be issued by the Director until he has received from theapplicant a written certification that (i) all notice requirements of this article have been compliedwith, together with proof thereof, and (ii) the applicant has the right to conduct the operations asset forth in the application and operations plan.  F. A permit is required to drill any coalbed methane gas well or to convert any methane drainageborehole into a coalbed methane gas well. In addition to the other requirements of this section,every permit application for a coalbed methane gas well shall include:  1. The method that the coalbed methane gas well operator will use to stimulate the well.  2. a. A signed consent from the coal operator of each coal seam that is located within (i) 750horizontal feet of the proposed well location that the applicant proposes to stimulate or (ii) 100vertical feet above or below a coal-bearing stratum that the applicant proposes to stimulate.  b. The consent required by this subsection may be (i) contained in a lease or other suchagreement; (ii) contained in an instrument of title; or (iii) in any case where a coal operatorcannot be located or identified and the operator has complied with § 45.2-1618, provided by apooling order entered pursuant to § 45.2-1620 or 45.2-1622 if such order contains a finding thatthe operator has exercised due diligence in attempting to identify and locate the coal operator,contained in such order. The consent required by this subsection shall be deemed to be grantedfor any tract where title to the coal is held by multiple owners if the applicant has obtainedconsent to stimulate from the cotenants holding a majority interest in the tract and none of thecoal cotenants has leased the tract for coal development. The requirement of signed consentcontained in this subsection shall in no way be considered to impair, abridge, or affect anycontractual rights or objections arising out of a coalbed methane gas contract or coalbedmethane gas lease entered into prior to January 1, 1990, between the applicant and any coaloperator or any extension or renewal thereto, and the existence of such lease or contractualarrangement and any extension or renewal thereto shall constitute a waiver of the requirementfor the applicant to file an additional signed consent.  3. The unit map, if any, approved by the Board.  G. No permit that is required by this chapter for an activity to be conducted within an area ofTidewater Virginia where drilling is authorized under subsection B of § 45.2-1646 shall begranted until the environmental impact assessment required by § 45.2-1646 has been conductedand the assessment has been reviewed by the Department.  H. The applicant for a permit for a gathering pipeline, oil or gas well, or coalbed methane wellshall identify in the permit application any cemetery, as identified on a United States GeologicalSurvey topographic map or located by routine field review, within 100 feet of the permittedactivity. 

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I. The operator of any coalbed methane well drilled within 250 feet of a cemetery shall complywith a written request of any person owning an interest in a private cemetery or the authorizedagent of a public cemetery that the operator of such well suspend operations for a period fromtwo hours before to two hours after any burial service that takes place on the surface area of suchcemetery. However, if the well operator or a mine operator determines that such suspension ofoperations will have an adverse effect on the safety of the well operations or mining operations,the operator shall be under no obligation to comply with the request, and operation of the wellshall continue.  1982, c. 347, § 45.1-311; 1985, c. 601; 1987, c. 452; 1988, c. 160, § 45.1-311.1; 1990, cc. 92, 967, §45.1-361.29; 1994, c. 957;1995, c. 269;1996, c. 854;1997, cc. 759, 765;1998, c. 229;2003, cc. 542,550;2008, c. 227;2021, Sp. Sess. I, c. 387.  § 45.2-1632. (Effective October 1, 2021) Notice of permit applications and permit modificationapplications required; contentA. Within one day of the day on which the application for a permit for a gas or oil operation isfiled, the applicant shall provide notice of the application to the following persons:  1. Every surface owner, coal owner, and mineral owner on the tract to be drilled;  2. Every coal operator who has registered an operation plan with the Department for activitieslocated on the tract to be drilled;  3. Every surface owner on a tract where the surface is to be disturbed;  4. Every gas, oil, or royalty owner (i) within one half of the distance specified in § 45.2-1616 forthat type of well or one half of the distance to the nearest well completed in the same pool,whichever is less, or (ii) within the boundaries of a drilling unit established pursuant to theprovisions of this chapter;  5. Every coal operator who has applied for or obtained a mining or prospecting permit withrespect to a tract located within 500 feet of the proposed well location or, in the case of aproposed coalbed methane gas well location, within 750 feet thereof;  6. Every coal owner or mineral owner on a tract located within 500 feet of the proposed welllocation or, in the case of a proposed coalbed methane gas well location, within 750 feet thereof;and  7. Every operator of a gas storage field certificated by the State Corporation Commission as apublic utility facility whose certificated area includes the well location or whose certificatedboundary is within 1,250 feet of the proposed well location.  B. Within one day of the day on which the application for a permit modification for a gas or oiloperation is filed, the applicant requesting such permit modification shall provide notice of theapplication to all persons listed in subsection A who may be directly affected by the proposedactivity.  C. Within one day of the day on which the application for a permit for geophysical operations issubmitted, the applicant shall provide notice to those persons listed in subdivisions A 1, 2, and 3.  D. Each notice required to be given pursuant to subsection A, B, or C shall contain a statement ofthe time within which objections may be made and the name and address of the person to whom

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objections shall be forwarded. Only a person entitled to notice under subsection A, B, or C shallhave standing to object to the issuance of the proposed permit or permit modification for a gas,oil, or geophysical operation as the use may be. Upon receipt of notice, any person may waive inwriting the time and right to object.  E. Within seven days of the day on which the application for a permit is filed, the applicant shallprovide notice to (i) the local governing body or chief executive officer of the locality where thewell is proposed to be located and (ii) the general public, through publication of a notice in atleast one newspaper of general circulation in the locality where the well is proposed to belocated.  F. An applicant shall make a reasonable effort to provide the notices required under subsectionsA, B, and C. If an applicant is unable to identify or locate any person to whom notice is required,then the notice provided in clause (ii) of subsection E shall be considered sufficient notice tosuch persons and the date of notification shall be the date of publication.  1982, c. 347, § 45.1-313; 1984, c. 590; 1987, c. 452; 1989, c. 529; 1990, c. 92, § 45.1-361.30; 1996,c. 854;2008, c. 534;2021, Sp. Sess. I, c. 387.  § 45.2-1633. (Effective October 1, 2021) Bonding and financial security requiredA. To ensure compliance with all laws and regulations pertaining to permitted activities and thefurnishing of reports and other information required by the Board or Director, each permitapplicant shall give bond with surety acceptable to the Director and payable to theCommonwealth. At the election of the permit applicant, a cash bond may be given. The amountof the bond required shall be sufficient to cover the costs of properly plugging the well andrestoring the site but in no case shall the amount of the bond be less than $10,000 per well plus$2,000 per acre of disturbed land, calculated to the nearest tenth of an acre. Each bond shallremain in force until released by the Director. The Director may require additional bond orfinancial security for any well proposed to be drilled in Tidewater Virginia.  B. Upon receipt of an application for multiple permits for gas or oil operations and at the requestof the permit applicant, the Director may, in lieu of requiring a separate bond for each permit,require a blanket bond. The amount of the blanket bond shall be as follows:  1. For one to 10 wells, $25,000.  2. For 11 to 50 wells, $50,000.  3. For 51 to 200 wells, $100,000.  4. For more than 200 wells, $200,000.  For purposes of calculating blanket bond amounts, from one-tenth of an acre to five acres ofdisturbed land for a separately permitted gathering pipeline shall be equivalent to one well. TheDirector shall adopt regulations for the release of acreage used to calculate blanket bondamounts for separately permitted gathering pipelines in cases where sites have been stabilized.  C. Any gas or oil operator who elects to post a blanket bond shall pay into the Gas and OilPlugging and Restoration Fund those fees and assessments required under the provisions of §45.2-1634.  1990, c. 92, § 45.1-361.31; 2019, c. 351;2021, Sp. Sess. I, c. 387. 

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§ 45.2-1634. (Effective October 1, 2021) Gas and Oil Plugging and Restoration FundA. There is hereby created in the state treasury a special nonreverting fund to be known as theGas and Oil Plugging and Restoration Fund, referred to in this section as "the Fund." Allpayments made into the Fund by gas or oil operators, all collections of debt for expendituresmade from the Fund, and all interest payments made into the Fund pursuant to the provisions ofthis section shall be paid into the state treasury and credited to the Fund. Interest earned onmoneys in the Fund shall remain in the Fund and be credited to the Fund. The Fund shall beestablished on the books of the Comptroller and any moneys remaining in the Fund, includinginterest thereon, at the end of each fiscal year shall not revert to the general fund but shallremain in the Fund. Expenditures and disbursements from the Fund shall be made by the StateTreasurer on warrants issued by the Comptroller upon written request signed by the Director orhis designee.  B. Each permittee operating under a blanket bond pursuant to § 45.2-1633 shall annually pay tothe Fund an amount equal to $50 multiplied by the number of permits he then holds, suchpayment to be submitted with the annual report required under § 45.2-1640, until the paymentsand interest accruing to the Fund totals $100,000. Whenever the Director determines that theFund's balance has fallen below $25,000 due to uncollectible debts, the Director shall assess a feeof $50 per permit per year on each permittee with a blanket bond until the Fund's balance onceagain reaches $100,000.  C. Moneys in the Fund shall be used solely for the purpose of supplementing bond proceeds inorder to pay for the full cost of plugging and restoration in the event of a blanket bond forfeiture.  D. The amount by which the cost of plugging and restoration exceeds the amount of the gas or oiloperator's forfeited bond shall constitute a debt of the operator to the Commonwealth. TheDirector is authorized to collect such debts together with the costs of collection throughappropriate legal action. All moneys collected pursuant to this subsection, less the costs ofcollection, shall be deposited in the Fund.  E. No permit shall be issued to a gas or oil operator until he has fully reimbursed theCommonwealth for any debt incurred pursuant to the provisions of subsection D.  F. In the event of a discontinuance of the Fund, any amounts remaining in the Fund shall bereturned to each gas or oil operator with a blanket bond in proportion to the number of permitsunder the blanket bond of each operator.  1990, c. 92, § 45.1-361.32; 2021, Sp. Sess. I, c. 387.  § 45.2-1635. (Effective October 1, 2021) Expiration of permitsEach permit issued pursuant to this chapter shall expire 24 months from its date of issuanceunless the permitted activity has commenced within that time period. An operator may renew anexisting permit for an additional 24 months by submitting a written request containing the coaloperator's approval and remitting a $325 renewal fee no later than the expiration date.  1990, c. 92, § 45.1-361.33; 1996, c. 854;2003, cc. 542, 550;2021, Sp. Sess. I, c. 387.  § 45.2-1636. (Effective October 1, 2021) Abandonment or cessation of well or corehole operation;plugging requiredUpon the abandonment or cessation of the operation of any well or corehole, the gas, oil, orgeophysical operator shall immediately fill and plug the well or corehole in the manner required

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by regulations in force at the time of abandonment or the operation's cessation.  1990, c. 92, § 45.1-361.34; 2021, Sp. Sess. I, c. 387.  § 45.2-1637. (Effective October 1, 2021) Objections to permits; hearingA. Objections to a new permit or permit modification may be filed with the Director by anyperson having standing as set out in § 45.2-1632. Such objections shall be filed within 15 days ofthe objecting party's receipt of the notice required by § 45.2-1632. Any person objecting to apermit shall state the reasons for his objections.  B. The only objections to permits or permit modifications that may be raised by a surface ownerare:  1. The operations plan for soil erosion and sediment control is not adequate or not effective;  2. Measures in addition to the requirement for a well's water-protection string are necessary toprotect freshwater-bearing strata;  3. The permitted work will constitute a hazard to the safety of any person;  4. Location of the coalbed methane well or coalbed methane well pipeline will unreasonablyinfringe on the surface owner's use of the surface, so long as a reasonable alternative site isavailable within the unit and granting the objection will not materially impair any rightcontained in an agreement, valid at the time of the objection, between the surface owner and theoperator or their predecessors or successors in interest; and  5. If the surface owner is an interstate park commission, the location of the well or pipeline willunreasonably infringe on the surface owner's use of the surface, so long as a reasonablealternative site is available within the unit and granting the objection will not materially impairany right contained in an agreement, valid at the time of the objection, between the surfaceowner and the operator or their predecessors or successors in interest.  C. The only objections to permits or permit modifications that may be raised by a royalty ownerare that the proposed well work:  1. Directly impinges upon the royalty owner's gas and oil interest;  2. Threatens to violate the objecting royalty owner's property or statutory rights aside from hiscontractual rights; and  3. Would not adequately prevent the escape of the Commonwealth's gas and oil resources orprovide for the accurate measurement of gas and oil production and delivery to the first point tosale.  D. Objections to permits or permit modifications may be raised by a coal owner or operatorpursuant to the provisions of §§ 45.2-1611 and 45.2-1612.  E. The only objections to permits or permit modifications that may be raised by a mineral ownerare those that could be raised by a coal owner under § 45.2-1611, so long as the mineral ownermakes the objection and affirmatively proves that it does in fact apply with equal force to themineral in question.  F. The only objections to permits or permit modifications that may be raised by a gas storage

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field operator are those in which the gas storage operator affirmatively proves that the proposedwell work will adversely affect the operation of his gas storage field certificated by the StateCorporation Commission; however, nothing in this subsection shall be construed to preclude theowner of nonstorage strata from drilling a well for the purpose of producing oil or gas from anystratum above or below the storage stratum.  G. The Director shall fix a time and place for an informal fact-finding hearing concerning anobjection filed pursuant to this section. The hearing shall be scheduled for not less than 20 normore than 30 days after the objection is filed. The Director shall prepare a notice of the hearing,stating all objections and by whom each is made, and send a copy of such notice by certified mail,return receipt requested, at least 10 days prior to the hearing date to the permit applicant and toevery person with standing to object as prescribed by § 45.2-1632.  H. At the hearing, if the parties fail to come to an agreement, the Director shall proceed to decidethe objection pursuant to the provisions of the Administrative Process Act (§ 2.2-4000 et seq.)relating to informal fact-finding procedures.  1982, c. 347, §§ 45.1-315, 45.1-316, 45.1-317; 1987, c. 452; 1989, c. 529; 1990, c. 92, § 45.1-361.35; 1996, c. 854;1998, c. 228;2002, c. 277;2021, Sp. Sess. I, c. 387.  § 45.2-1638. (Effective October 1, 2021) Appeals of Director's decisions to the BoardA. Any person with standing under the provisions of § 45.2-1632 who is aggrieved by a decisionof the Director may appeal to the Board, subject to the limitations imposed by subsection B, bypetition to the Board filed within 10 days following the appealed decision.  B. No petition for appeal may raise any matter other than a matter that was raised by the Directoror that the petitioner put in issue either by application or by an objection, proposal, or claimmade and specified in writing at the informal fact-finding hearing held under § 45.2-1637 leadingto the appealed decision.  1982, c. 347, § 45.1-325; 1984, c. 590; 1990, c. 92, § 45.1-361.36; 2021, Sp. Sess. I, c. 387.  § 45.2-1639. (Effective October 1, 2021) Persons required to register; designated agentsA. Any person who owns a well, drills a well, completes well work, operates any well or gatheringpipeline, conducts ground-disturbing geophysical explorations, or transports gas or oil up to andincluding the first point of sale shall register with the Director and shall provide his name andaddress and the name, address, and official title of the person in charge of his operations in theCommonwealth.  B. Any person registering under subsection A shall designate the name and address of an agentwho shall be the attorney-in-fact of the registrant for the purposes set forth in this section. Thedesignated agent shall be a resident of the Commonwealth. Notices, orders, othercommunications, and all processes issued pursuant to this chapter may be served upon orotherwise delivered to the designated agent as and for the operator. Any designation of an agentshall remain in force until the Director is notified in writing of a designation termination and thedesignation of a new agent.  1990, c. 92, § 45.1-361.37; 2021, Sp. Sess. I, c. 387.  § 45.2-1640. (Effective October 1, 2021) Report of permitted activities and production required;contents

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A. Each holder of a permit for a gas or oil well or gathering pipeline shall file monthly and annualreports of his activities as prescribed by the Director. Such reports shall be for the purpose ofobtaining information regarding the production and sale of gas and oil resources, as well asinformation concerning the ownership and control of permitted activities. Filing of such reportsby a permittee shall be a condition of such permit. Every annual report filed by a permittee shallcontain a certification that such permittee has paid all severance taxes levied under theprovisions of §§ 58.1-3712, 58.1-3713, and 58.1-3741.  B. At the same time that a permittee files the monthly and annual reports as required bysubsection A, the permittee shall send copies of the reports by mail to the commissioner of therevenue of the political subdivision where the permitted well is located.  1990, c. 92, § 45.1-361.38; 1992, c. 361; 2013, cc. 305, 618;2016, c. 305;2021, Sp. Sess. I, c. 387.  § 45.2-1641. (Effective October 1, 2021) Developing a gas or oil well as a water wellIf any well drilled for gas or oil does not produce commercial or paying quantities of eitherresource, the well may be developed as a water well upon the request of the surface owner of theproperty on which the well is located. Any such development of a water well shall occur onlyafter notice is given to the Director and his approval has been received. Such development of awater well shall be performed in accordance with applicable state and local requirements. Unlessthe gas or oil operator and surface owner otherwise agree, the surface owner shall pay the gas oroil operator a reasonable sum for all casing and tubing set and left in the well that would haveotherwise been removed upon plugging of the well.  1982, c. 347, § 45.1-350; 1990, c. 92, § 45.1-361.39; 2021, Sp. Sess. I, c. 387.  § 45.2-1642. (Effective October 1, 2021) Orphaned Well Fund; orphaned wellsA. There is hereby created in the state treasury a special nonreverting fund to be known as theOrphaned Well Fund, referred to in this section as "the Fund." All moneys appropriated to it andany surcharges collected pursuant to subsection D shall be paid into the state treasury andcredited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and becredited to it. The Fund shall be established on the books of the Comptroller. Any moneysremaining in the Fund, including interest thereon, at the end of each fiscal year shall not revertto the general fund but shall remain in the Fund. Moneys from the Fund shall be used solely forpurposes of restoration and plugging of orphaned wells. Expenditures and disbursements fromthe Fund shall be made by the State Treasurer on warrants issued by the Comptroller uponwritten request signed by the Director or his designee.  B. The Director shall conduct a survey to determine the condition and location of orphaned wellsin the Commonwealth. He shall establish priorities for the plugging and restoration of theidentified orphaned wells. The plugging and restoration of orphaned well sites that pose animminent danger to public safety shall have the highest priority.  C. In performing his duties under this section, the Director shall make every reasonable effort toidentify and obtain the permission of a surface owner prior to entering onto the surface owner'sland. In all cases, the Director shall as soon as practicable cause to be published in a newspaperof general circulation in the county or city wherein an orphaned well is located a notice of theproposed plugging and restoration work to be conducted on the property.  D. Each operator who applies for a new permit for any activity other than geophysical operations

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shall pay a $200 surcharge per permit into the Fund. Such surcharge shall continue until theDirector determines that all orphaned wells in the Commonwealth are properly plugged and theirsites are properly stabilized.  E. In the event of a discontinuance of the Fund, any amounts remaining in the Fund shall beplaced in the Gas and Oil Plugging Restoration Fund created pursuant to § 45.2-1634.  1990, c. 92, § 45.1-361.40; 2017, c. 18;2021, Sp. Sess. I, c. 387.  § 45.2-1643. (Effective October 1, 2021) Interference by injection wells with groundwater supplyA. For purposes of this section:  "Beneficial use" means the same as that term is defined in § 62.1-255.  "Groundwater" means the same as that term is defined in § 62.1-255.  B. Any person who owns or operates an injection well in a manner that proximately causes thecontamination or diminution of groundwater used for a beneficial use by any person who resideswithin the lesser of (i) the area of review required by the U.S. Environmental Protection Agencyfor the permitting of such injection well or (ii) a one-half-mile radius of the well shall provide theperson with a replacement water supply. A replacement water supply shall provide the personwith water of equivalent quality and quantity as was provided by groundwater prior to thecontamination or diminution of the water supply resulting from the operation of the injectionwell. A replacement water supply shall include the provision of necessary storage and servicefacilities.  C. This section shall apply to any injection well operating under a permit from the Director.  1992, c. 324, § 45.1-361.41; 1993, c. 276; 2021, Sp. Sess. I, c. 387.  § 45.2-1644. (Effective October 1, 2021) Safety in coalbed methane gas, oil, and geophysicaloperationsThe Director shall inspect permitted coalbed methane well and related facility operations toensure the safety of persons on permitted sites. If an inspection reveals any hazardous conditionthat creates an imminent danger, the Director shall issue a closure order pursuant to § 45.2-1629requiring the area to be cleared or the equipment removed from use, except for (i) work necessaryto continue to vent methane from an active underground mine if such work can be done safelyand (ii) any work necessary to correct or eliminate the imminent danger. The Director shall liftthe closure order when he finds that the imminent danger has been corrected or eliminated. If aninspection reveals any other condition that creates a risk to the safety or health of any person onthe permitted site, the Director shall notify the Department of Labor and Industry for actionsunder Title 40.1, as applicable.  1997, c. 421, § 45.1-361.42; 2021, Sp. Sess. I, c. 387.    Article 4. Drilling for Gas or Oil in the Chesapeake Bay or Tidewater Virginia;Hydraulic Fracturing§ 45.2-1645. (Effective October 1, 2021) Chesapeake Bay; drilling for gas or oil prohibitedNotwithstanding any other law, no person shall drill for gas or oil in the waters of theChesapeake Bay or any of its tributaries. The provisions of this subsection shall be enforcedconsistent with the requirements of this chapter.

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  1989, c. 325; § 62.1-195.1; 1990, c. 967; 1992, cc. 480, 887; 1993, c. 239; 1994, c. 957;2012, cc. 785, 819;2013, cc. 756, 793;2021, Sp. Sess. I, c. 387.  § 45.2-1646. (Effective October 1, 2021) Tidewater Virginia; drilling for gas or oil prohibited incertain areasA. In Tidewater Virginia, as defined in § 62.1-44.15:68, no person shall drill for gas or oil (i)within 500 feet of the shoreline of the waters of the Chesapeake Bay or any of its tributaries, asmeasured landward of the shoreline, or (ii) if it is farther than 500 feet from such shoreline, inany Chesapeake Bay Preservation Area, as defined in § 62.1-44.15:68, that a local governmentdesignates as a Resource Protection Area and incorporates into its local comprehensive plan.Resource Protection Areas shall be defined according to the criteria developed by the State WaterControl Board pursuant to § 62.1-44.15:72.  B. If any person desires to drill for gas or oil in any area of Tidewater Virginia where drilling isnot prohibited by the provisions of subsection A, he shall submit an environmental impactassessment to the Department as part of his application for a permit to drill. Such environmentalimpact assessment shall include:  1. The probabilities and consequences of accidental discharge of gas or oil into the environmentduring drilling, production, and transportation for:  a. Finfish, shellfish, and other marine or freshwater organisms;  b. Birds and other wildlife that use the air and water resources;  c. Air and water quality; and  d. Land and water resources;  2. Recommendations for minimizing any adverse economic, fiscal, or environmental impacts;and  3. An examination of the secondary environmental effects of induced economic development dueto the drilling and production.  C. Upon receipt of an environmental impact assessment, the Department shall notify theDepartment of Environmental Quality to coordinate a review of the environmental impactassessment. DEQ shall:  1. Publish in the Virginia Register of Regulations a notice that is sufficient to identify theenvironmental impact assessment and provides an opportunity for public review of and commenton the assessment. The period for public review and comment shall not be less than 30 days fromthe date of publication;  2. Submit the environmental impact assessment to all appropriate state agencies to review theassessment and submit their comments to DEQ; and  3. Based upon the review by all appropriate state agencies and the public comments received,submit findings and recommendations to the Department within 90 days after notification andreceipt of the environmental impact assessment from the Department.  D. The Department shall not grant a permit under § 45.2-1631 until it has considered the

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findings and recommendations of DEQ.  E. DEQ shall, in conjunction with other state agencies and in conformance with theAdministrative Process Act (§ 2.2-4000 et seq.), develop criteria and procedures to assure theorderly preparation and evaluation of environmental impact assessments required by thissection.  F. A person may drill an exploratory well or a gas well in any area of Tidewater Virginia wheredrilling is not prohibited by the provisions of subsection A only if:  1. For directional drilling, the person has the permission of the owners of all lands to bedirectionally drilled into;  2. The person files an oil discharge contingency plan and proof of financial responsibility toimplement the plan, both already filed with and approved by the State Water Control Board. Forpurposes of this section, such oil discharge contingency plan shall comply with the requirementsset forth in § 62.1-44.34:15. The State Water Control Board's regulations governing the amountof any financial responsibility required shall take into account the type of operation, the locationof the well, the risk of discharge or accidental release, the potential damage or injury to statewaters or sensitive natural resource features or the impairment of their beneficial use that mayresult from discharge or release, the potential cost of containment and cleanup, and the natureand degree of injury or interference with general health, welfare, and property that may resultfrom discharge or accidental release;  3. All land-disturbing activities resulting from the construction and operation of the permanentfacilities necessary to implement the contingency plan and the area within the berm will belocated outside any area described in subsection A;  4. The drilling site is stabilized with boards, gravel, or other materials that will result in minimalamounts of runoff;  5. Persons certified in blowout prevention are present at all times during drilling;  6. Conductor pipe is set as necessary from the surface;  7. Casing is set and pressure-grouted from the surface to a point at least 2,500 feet below thesurface or 300 feet below the deepest known groundwater, as defined in § 62.1-255, for abeneficial use, as defined in § 62.1-10, whichever is deeper;  8. Freshwater-based drilling mud is used during drilling;  9. There is no onsite disposal of drilling muds, produced contaminated fluids, wastecontaminated fluids, or other contaminated fluids;  10. Multiple blow-out preventers are employed; and  11. The person complies with all requirements of Chapter 16 (§ 45.2-1600 et seq.) and regulationsadopted thereunder.  G. The provisions of subsection A and subdivisions F 1 and 4 through 9 shall be enforcedconsistent with the requirements of Chapter 16 (§ 45.2-1600 et seq.).  H. If exploration activities in Tidewater Virginia result in a finding by the Director that

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production of commercially recoverable quantities of oil is likely and imminent, the Directorshall notify the Secretary of Commerce and Trade and the Secretary of Natural and HistoricResources. At that time, the Secretaries shall develop a joint report to the Governor and theGeneral Assembly assessing the environmental risks and safeguards, transportation issues, state-of-the-art oil production well technology, economic impacts, regulatory initiatives, operationalstandards, and other matters related to the production of oil in the region. No permit for an oilproduction well shall be issued until (i) the Governor has had an opportunity to review the reportand make recommendations, in the public interest, for legislative and regulatory changes; (ii) theGeneral Assembly, during the next upcoming regular session, has acted on the Governor'srecommendations or on its own initiatives; and (iii) any resulting legislation has becomeeffective. The report by the Secretaries and the Governor's recommendations shall be completedwithin 18 months of the notification of the Secretaries of the findings of the Director.  1989, c. 325; § 62.1-195.1; 1990, c. 967; 1992, cc. 480, 887; 1993, c. 239; 1994, c. 957;2012, cc. 785, 819;2013, cc. 756, 793;2021, Sp. Sess. I, cc. 387, 401.  § 45.2-1647. (Effective October 1, 2021) Hydraulic fracturing; groundwater management areaNo person shall conduct any hydraulic fracturing in any well that has been drilled through anyportion of a groundwater management area declared by regulation prior to January 1, 2020,pursuant to the provisions of the Ground Water Management Act of 1992 (§ 62.1-254 et seq.). Forpurposes of this section, "hydraulic fracturing" means the treatment of a well by the applicationof hydraulic fracturing fluid, including a base fluid and any additive, under pressure for theexpress purpose of initiating or propagating fractures in a target geologic formation to enhanceproduction of natural gas or oil.  2020, c. 626;§ 62.1-195.3; 2021, Sp. Sess. I, c. 387.    Article 5. Replacement of Water by Gas Well Operators§ 45.2-1648. (Effective October 1, 2021) Operator's right to sample waterAn operator may enter upon surface land at reasonable times and in a reasonable manner toobtain samples of water from any water well that is (i) located within 1,320 feet of a proposed orexisting gas well and (ii) actually being utilized by the surface owner or occupant for domesticuse. If the surface owner or occupant refuses to allow the operator to sample or causes theoperator to be prevented from sampling any such water well, the operator shall promptly notifythe Department of such refusal or prevention. The Department shall maintain a record of suchnotifications. In the event of such a refusal or prevention, the surface owner shall not be entitledto the remedies set forth in § 45.2-1649.  1998, c. 227, § 45.1-361.43; 2009, c. 293;2017, c. 17;2021, Sp. Sess. I, c. 387.  § 45.2-1649. (Effective October 1, 2021) Replacement of water supplyIf any water supply of a surface owner who obtains all or part of his supply of water for domesticuse from a water well has been materially affected by contamination or partial or completeinterruption proximately resulting from a gas well operation within 1,320 feet of the water well,the operator of such gas well shall promptly provide a replacement water supply that shall becapable of meeting the uses such water supply met prior to the contamination or partial orcomplete interruption.  1998, c. 227, § 45.1-361.44; 2009, c. 293;2017, c. 17;2021, Sp. Sess. I, c. 387. 

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